Available December 23, 2025

Episode 011: The Lies We Tell at Work – Why Workplace Dishonesty Destroys Transformation

DURATION: 23 minutes
HOST: Kevin Novak
SHOW: The Human Factor Podcast

OPENING SEQUENCE

KEVIN: Let me tell you about a moment that changed how I think about organizational honesty.

I was consulting with a mid-sized technology company several years ago. They’d brought me in because a major product launch had failed spectacularly, and they wanted to understand what went wrong. During the post-mortem interviews, I sat down with a project manager named David, a solid performer with about eight years at the company.

David told me something I’ve never forgotten. He said, “I knew we were going to miss the deadline by at least six weeks. I knew it in my gut three months before launch. But every time I raised concerns in our status meetings, my director would ask, ‘Are you saying you can’t do your job?’ So I stopped raising concerns. I started saying what everyone else was saying: ‘We’re on track. We’ll make it work.'”

But here’s the part that really stuck with me. I also interviewed his director, a woman named Susan, who was genuinely respected in the organization. When I asked her about the project’s communication breakdown, she said, “I wish someone had told me how bad things really were. I would have pushed back the timeline. I would have gotten them more resources. But every update I received said we were fine.”

I asked her directly: “What would have happened if David had told you the project was six weeks behind?” She paused for a long moment, and then she said something that revealed everything: “Honestly? I probably would have pushed back. I would have asked him to find a way. I would have questioned whether he was managing his team effectively.”

She caught herself. “I guess I’m part of the reason no one told me the truth.”

What struck me about that conversation was how both people were trapped. David lacked the courage to speak honestly because he feared how Susan would respond. And Susan, without realizing it, had created an environment where honesty felt dangerous. Both of them were good people. Neither wanted the project to fail. But the lies they told, and the lies they enabled, guaranteed that failure.

This is what I call the courage gap, and it operates on both sides of every conversation. It takes courage to tell the truth. But it also takes courage to hear it.

KEVIN: I’m Kevin Novak, CEO of 2040 Digital, Professor at the University of Maryland, and author of The Truth About Transformation, Leading in the Age of AI, Uncertainty and Human Complexity, and the Ideas and Innovations weekly newsletter.

Welcome to The Human Factor Podcast. The show that explores the intersection of humanity, technology, and transformation, along with the psychology behind transformation success.

KEVIN: Here’s something that might make you uncomfortable. You lied today. Maybe you told a colleague their presentation was “great” when it was mediocre. Maybe you said you were “almost done” with a project you hadn’t even started. Maybe you called in sick when you just needed a mental health day.

And here’s what’s even more uncomfortable: I’ve done all of those things too. We all have. Research suggests that the average person tells between one and two lies per day in social interactions. In workplace settings, that number increases significantly.

But here’s what confounds me at times as someone who has spent two decades studying organizational transformation: those small lies, those tiny acts of workplace dishonesty, they’re not harmless. They’re the invisible force destroying your organization’s ability to change, adapt, and survive.

Today we’re going somewhere uncomfortable. In the next 25 minutes, you’ll discover why people lie at work, the psychology behind workplace deception, what it costs your organization, and most importantly, why addressing workplace dishonesty and the courage deficit that enables it is the hidden key to change and transformation success.

SEGMENT 1: THE PSYCHOLOGY OF WORKPLACE DECEPTION

Why We Lie: The Six Core Motivations

KEVIN: Let’s start with the fundamental question: why do people lie? Dr. Paul Ekman, the pioneering psychologist who spent decades studying deception, identified six core reasons people engage in dishonesty.

First, to obtain a reward they couldn’t get otherwise. Second, to protect others from harm or discomfort. Third, to win admiration or approval. Fourth, to avoid awkward social situations. Fifth, to avoid embarrassment. And sixth, to exercise control over their own narrative.

Now, here’s what’s fascinating about this list. Notice how many of these motivations are fundamentally about self-protection rather than malicious intent. Most workplace lying isn’t about getting ahead at someone else’s expense. It’s simply about survival.

The Workplace Deception Landscape

KEVIN: The statistics on workplace lying are sobering. According to research published in human resources journals, approximately 78% of job candidates admit to lying during the hiring process.

Once hired, “I’m not feeling well” remains the most common workplace lie.

But here’s where it gets interesting. Research from David Shulman at Lafayette College found that younger employees tend to lie more frequently than older colleagues, and employees lie more on Mondays and Fridays, essentially extending their weekends through deception.

Most importantly, dissatisfied employees lie significantly more than satisfied ones. When people feel trapped, undervalued, or voiceless, they turn to deception as a coping mechanism. Interesting, isn’t it?

The Cognitive Architecture of Deception

KEVIN: Now, let’s go deeper into the psychology. When someone lies, their brain has to work harder. They need to suppress the truth, construct the lie, monitor the listener’s response, and remember what they said for later consistency. This cognitive load is exhausting.

But here’s the twist: the brain has a solution. It’s called self-deception. When we lie to ourselves first, we reduce the cognitive burden of lying to others. We become more convincing because we genuinely believe our own distortions.

Leon Festinger’s cognitive dissonance research demonstrated this beautifully. In his classic studies, people who were paid just one dollar to tell a lie actually convinced themselves they believed the lie, while those paid twenty dollars knew they were lying.

The brain seeks consistency and certainty, and when our actions conflict with our beliefs, something has to give.

In organizational settings, this means employees don’t just lie to their managers. They often lie to themselves first. “This project is on track” becomes something they genuinely believe, even as evidence mounts to the contrary.

SEGMENT 2: THE ORGANIZATIONAL COST OF DISHONESTY

Identity-Based Lying in Organizations

KEVIN: In 2015, researchers Leavitt and Sluss published groundbreaking work on what they called identity-based lying. Their core insight was that workplace lying isn’t primarily about self-interest in the traditional sense. It’s about protecting valued identities.

Think about it this way. When you identify strongly with your role, like “I’m a competent project manager” or “I’m a strategic thinker,” anything that threatens that identity triggers a defensive response. And lying becomes a way to protect who you believe yourself to be. Remember in Episode 8 when I discussed resistance traps and the challenges of protectionism.

This is particularly dangerous when identity threats feel intractable, meaning people believe there’s no legitimate way to resolve the threat. If admitting a mistake feels like admitting you’re fundamentally incompetent, lying becomes psychologically necessary.

Structural Role Conflicts

KEVIN: Earlier research by Grover in 1993 identified another critical driver of workplace deception: structural role conflicts. Organizations often create impossible situations where employees face conflicting expectations.

You’re told to be innovative but punished for failure. You’re expected to meet aggressive deadlines but also deliver perfect quality. You’re supposed to be a team player, but evaluated on individual metrics. When these conflicts become unresolvable, people lie to reduce the dissonance.

In my consulting work, I’ve seen this pattern repeatedly. Middle managers caught between executive expectations and team realities become chronic liars in both directions, telling leadership what they want to hear while telling teams that “everything’s fine” when it clearly isn’t.

The Financial Impact

KEVIN: Let’s talk numbers. According to research published by the Association of Certified Fraud Examiners, organizations lose approximately 5% of their annual revenues to fraud and deception. Globally, that translates to trillions of dollars.

But the hidden costs are even larger. When employees lie about project status, problems compound until they become crises. When teams hide concerns about a new strategy, organizations invest millions in initiatives doomed to fail. When leaders don’t hear honest feedback, they make decisions based on distorted information.

And here’s the kicker: research shows that senior positions actually lie more frequently than entry-level roles. One study found 37% of managers admitted to lying at work compared to 28% of entry-level employees. The people making the biggest decisions often have the most distorted information.

SEGMENT 3: PSYCHOLOGICAL SAFETY AS THE ANTIDOTE

Amy Edmondson’s Revolutionary Research

KEVIN: In the 1990s, Harvard professor Amy Edmondson made a discovery that transformed our understanding of team performance. She was studying medical teams in hospitals, trying to understand why some teams performed better than others.

What she found seemed counterintuitive at first: higher-performing teams reported more errors than lower-performing teams. That didn’t make sense until she realized the explanation. Better teams weren’t making more mistakes. They were simply more willing to discuss the mistakes they made.

This insight led to her concept of psychological safety, which she defines as a belief that you can speak up with ideas, questions, concerns, or mistakes without fear of repercussions. It’s an environment of low interpersonal fear where candor and vulnerability are welcome. Elizabeth Stewart and I have both sought to emphasize the criticality of psychological safety in the episodes of this podcast.

What Psychological Safety Is NOT

KEVIN: Now, there’s a common misconception I want to address, as we haven’t touched on this point before. Psychological safety is not about being comfortable. It’s not about avoiding conflict. It’s not about lowering standards or removing accountability.

In fact, Edmondson’s research shows that psychological safety and accountability are two independent dimensions that actually reinforce each other. When you have high psychological safety but low accountability, you get a comfort zone where nothing gets done. When you have high accountability but low psychological safety, you get an anxiety zone where people are too afraid to take risks.

The sweet spot, the high-performance zone, requires both. People need to feel safe enough to be honest and accountable enough to drive for excellence.

How Fear Destroys Organizational Intelligence

KEVIN: Here’s what happens neurologically when people don’t feel psychologically safe. Fear activates the amygdala, triggering fight-or-flight responses. This diverts cognitive resources away from the prefrontal cortex, which handles analytical thinking, creativity, and complex problem-solving.

In other words, when employees are afraid, they literally become less intelligent. They can’t think as clearly, innovate as effectively, or solve problems as creatively. And of course, they lie to protect themselves.

The organizational cost is profound. Problems go unreported until they become crises. Innovation stalls because people fear proposing ideas that might fail. And transformation efforts collapse because no one tells leadership the truth about what’s actually happening on the ground.

SEGMENT 4: THE HUMAN FACTOR METHOD APPROACH

Why Honesty Is a Transformation Prerequisite

KEVIN: Let me connect all of this to organizational transformation. Research from McKinsey surveys of over 3,000 executives shows that only about one-third of transformation efforts are considered successful. That’s a staggering failure rate.

When you dig into why transformations fail, you find the same pattern again and again. Leaders don’t hear honest feedback about what’s working and what isn’t. Employees tell leadership what they want to hear rather than what they need to know. Problems are hidden until they become insurmountable.

In essence, organizational dishonesty creates a fundamental barrier to adaptation. You can’t transform what you can’t honestly assess. And you can’t honestly assess anything in a culture where people are afraid to tell the truth.

The UNDERSTAND Phase: Diagnosing Deception Patterns

KEVIN: In The Human Factor Method, the first phase is UNDERSTAND, which involves deep psychological discovery before any change initiative begins. Part of that effort must include understanding where dishonesty patterns exist in your organization.

This isn’t about catching liars or punishing people. It’s about understanding the structural conditions that make lying feel necessary. Where are the impossible role conflicts? What identity threats are people facing? Where has psychological safety broken down?

Our transformation readiness assessment helps organizations identify these patterns before they sabotage change efforts. Because if you launch a major transformation in a culture of fear and dishonesty, you’re setting yourself up for failure.

Building Psychological Safety Into Transformation

KEVIN: Let’s continue. Edmondson’s research provides a four-step framework for building psychological safety that aligns perfectly with Human Factor Method principles.

First, frame work as a learning problem. When leaders emphasize uncertainty, acknowledge that they don’t have all the answers, and explicitly state that they need everyone’s input, it creates permission for honesty.

Second, model fallibility and curiosity. Leaders must demonstrate vulnerability by admitting their own mistakes and asking questions that show genuine curiosity rather than judgment.

Third, invite participation proactively. Don’t wait for people to speak up. Create explicit structures and moments where feedback is requested and expected.

Fourth, respond productively. This is where most organizations fail. When someone speaks truth to power and gets punished, even subtly, the message spreads instantly. Everyone learns that honesty is dangerous.

Practical Steps for Leaders

KEVIN: Let me give you some practical actions you can take starting tomorrow.

Prioritize honesty as a core value, and actually mean it. Don’t just put it on a poster. Demonstrate through your actions that truth-telling is rewarded even when the truth is uncomfortable.

Model transparency yourself. Share your own uncertainties, mistakes, and learning moments. If you expect honesty from others, you must demonstrate it first.

Recalibrate your performance management systems. If your metrics punish honest admission of problems, you’re incentivizing deception. Create space for learning from failure rather than just celebrating success.

Create visible ethical reminders. Research has shown that simple prompts like honesty pledges at the beginning of processes can reduce deceptive behavior significantly.

And finally, address the structural conditions that make lying feel necessary. If people are caught in impossible role conflicts, fix the conflicts. If identity threats feel intractable, create pathways for people to maintain their sense of competence while admitting mistakes.

CLOSING SEQUENCE

Key Takeaway

KEVIN: Let me leave you with something to consider. The irony of organizational dishonesty is profound. Organizations that most desperately need to transform often have cultures that punish honesty, which guarantees their transformation efforts will fail, which reinforces the very problems that made transformation necessary in the first place.

Breaking this cycle requires courage. It requires leaders who are willing to hear uncomfortable truths and who examine their own reactions when someone speaks honestly. Remember David and Susan from the beginning of this episode? The lies didn’t start with David. They started with Susan’s inability to receive hard news without making it feel like an attack on the messenger. David needed courage to speak. But Susan needed courage to listen.

It requires systems that make honesty safer than deception. And it requires understanding that people don’t lie because they’re bad. They lie because they’re human, and humans protect themselves.

The question isn’t whether your organization has dishonesty. It does. The question is whether you have the psychological infrastructure to surface it, address it, and transform it into the radical candor that successful change requires.

Explore the two issues of ideas and innovations available on 2040digital.com and subtack: Leading with Courage and Why We Lie to further understand why people lie and why people lack the courage to speak honestly and accept feedback, the structural barriers to organizational candor, and the characteristics of courageous leadership.

KEVIN: If you found this episode helpful, subscribe to The Human Factor Podcast wherever you listen to podcasts. Leave a rating and a comment. And share this episode with your leadership team, because understanding why people lie at work is the first step toward building a culture where they don’t have to.

If you want weekly insights about transformation psychology, organizational behavior, and the human factors that determine transformation success, subscribe to the Ideas and Innovations newsletter on Substack. Every week I share practical frameworks and research on why change succeeds or fails.

Until next time, remember you can’t transform what you can’t honestly assess.

This has been The Human Factor Podcast. I’m Kevin Novak. Thanks for watching or listening.

END OF EPISODE

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Upcoming: Available December 30, 2025

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